Innovative and relevant solutions for the crisis of stuff

Rag News

Innovative and
relevant solutions
for the crisis of stuff

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April 2020

Bank & Vogue presents the Rag News, the hottest free source of news to keep you up-to-date on the global used goods industry.

Rag News: Special Coronavirus Edition


The Effects of Coronavirus on the Market

Without a doubt, this Pandemic has had a major effect on many countries and economies around the world. The global economy has taken a major hit. People are spending less, and more people have become unemployed due to business closures. Not only have there been macro-economic effects due to this pandemic, but also many micro-economic effects. Many businesses have been affected by the lockdowns and government implementations to reduce the spread of coronavirus. Businesses have closed their doors, the import and export of goods has significantly decreased, as well as customer consumption.

The Mitumba Exports

This crisis has not been an exception to the second-hand industry. One of the largest end consumer markets is in Africa, with 80% of the global consumption. In fact, Kenya is one of the largest importers of second-hand clothing. They have banned the importation of used garments as a precautionary measure. This is a big hit to the second-hand industry, since Kenya imports around 100,000 tonnes of clothing a year. Another of the big end consumer market is in Congo which is in permanent lockdown, as many other African countries.

This situation is creating a liquidity crisis in the industry for most of the stakeholders. For instance, graders who supply the African market are not purchasing institutional clothing anymore. Due to the fact that their main market is on lockdown. These companies have to afford very high fixed costs and don’t have a source of income anymore. They are mainly based in India, Pakistan, Dubai, Toronto, and Houston.

Certainly, these issues have produced a surplus of product in the market. As well as a higher competition among different suppliers of institutional clothing in North America. Which as a result it impacts the prices drastically. Some major charities have decided to start producing credential clothing instead of institutional clothing due to the fact that their retail stores are closed and trying to target other end markets such as Latin America. However, either way, prices have dropped 50% in both commodities because of the surplus. 

 

The Outcome in the Market

In sum, all different industries and markets are being affected by this pandemic in one way or another. It is crucial to be informed with the most up to date information in order to make a decision ahead of the competition. The higher the quality and the best-priced product will be the one moving quicker and easier in the current marketplace. We continue to support our partners and help maintain everyone informed, week to week with the most up to date information available to us.

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